January 14, 2008

EDITOR'S NOTES

The concept of a “prevailing party” has long caused questions among litigants, especially when attorney fees are at stake. If a party receives an award as a result of the litigation, does it have prevailing status? Must a party receive a favorable judgment before it can recover attorney fees? In California, Civil Code section 1717 states:

[T]he party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section.

In the case of this week’s first summary, a California appellate court determined that the subcontractor breached the contract, but was, nevertheless, entitled to payment for work performed. That did not make it the prevailing party, however. In such a case as this, the court opted to rule that neither party prevailed, proving that a net recovery does not guarantee prevailing status.

Also this week, a highway project’s schedule went awry when the state’s department of transportation refused to allow overnight lane closures, severely affecting the contractor’s anticipated efficiency on the project. And, a mechanic’s lien can coexist with a contract’s binding arbitration agreement, according to a state supreme court. The one does not cancel out the other, it ruled.

Subscribers: click here for the full story

Non-Subscribers: click here to subscribe